Definitions Flashcards
Profit
What a business makes when the income earned (revenue) is greater than the costs of production (expenses)
Business
An organisation that provides goods and/or services to consumers in order to make a profit
Finished Goods
Goods that are ready for customers to buy and use
Market Share
The business’s share of total market is subsided into groups that share one or more common characteristics
Multinational Corporation
A company that has branches in many different countries (sometimes referred to as a Transnation corporation)
Objective
A statement of what an organisation expects to achieve over a set period.
Economy
A system set up to determine what to produce, how to produce and whom production will be distributed.
Economic Growth
When the real value of goods and services increases over a set period of time.
Export
Goods or services sold by one country to individuals, businesses or governments in another country with the aim of extending sales and market penetration.
Business Environment
The surrounding conditions in which the business operates. They can be divided into two broad categories: internal and external.
Internal Environment
Those factors over which the business has some degree of control (sometimes called the micro environment)
Demand
In business terms, the quantity of a product that consumers are prepared to purchase.
Entrepreneurship
The ability and willingness to start, operate and assume the risk of a business venture in the hope of making a profit.
Market Conditions
The features of a market into which a new product or service is to be introduced; they include factors such as the number of potential customers, level of competition and potential for growth.
Market Research
A process of systematically collecting, recording and analysing information concerning a specific market.
Proprietary Company
An incorporated business with a minimum of two, and a maximum of 50, private shareholders. (Also called a private company)
Research and Development
A set of activities undertaken to: improve existing products, create new products and improve production.
Shareholders
The owners of the company.
Silent Partner
One who contributes financially to the business but takes no part in the running of the partnership.
Sole Trader
A business owned and operated by one person.
Business Entity
Any organisation engaged in the production of goods and services.
Incorporated
Describes a business that has a separate legal entity from the owner(s)
Incorporation
The process that a business goes through to become a registered company and a separate legal entity.
Innovation
Either creating a new product, service or process or significantly improving an existing one.
Franchise
When a business sells to others the rights to distribute its products under its name.
Franchisee
An individual or organisation that purchases a franchise.
Franchisor
An individual or organisation that grants a franchise.
Complementary Businesses
Those that offer products or services that are related to a different business and that may be of use to customers or a particular business.
Cooperative
A democratic organisation owned and controlled by people it serves, who join together for common benefit.
